Should you pay off your HELP/HECS debt before June 2023 rise?

TL;DR

Paying off help debt depends on personal views on debt and financial goals, but considering interest rates and other debts is important.

Transcript

foreign again from Consortium private world I thought I'd do a very quick video this week on help debts we recently received a question from somebody wondering if they should be paying it off so I thought I would do a very quick video and hopefully it helps more than just one person out there first of all a help debt is a higher education loan prog... Read More

Key Insights

• ✋ Help debt is a higher education loan program debt.
• 🫥 Interest rates on help debt are in line with the Consumer Price Index.
• 🖐️ Personal views on debt play a significant role in determining whether to prioritize help debt repayment.
• ☠️ Prioritizing debts with the highest interest rates is generally recommended.
• 🥡 Building wealth through investing and taking advantage of compounding interest in superannuation can be beneficial.
• 👪 The first home super saver scheme allows individuals to make tax-concessional contributions to superannuation to save for their first home.
• 🥶 There are government incentives, such as the co-contribution scheme, for contributing to superannuation.

Questions & Answers

Q: What is help debt?

Help debt is a debt acquired through the higher education loan program, typically associated with low interest rates.

Q: How are interest rates on help debt determined?

Interest rates on help debt are determined based on the Consumer Price Index (CPI), which reflects inflation. The current rate is 7%.

Q: Should I prioritize paying off help debt?

This depends on your personal views on debt and financial goals. If you prioritize paying off high-interest debts first, help debt may not be the immediate priority.

Q: What are some alternative options for surplus cash flow?

Instead of paying off help debt, you might consider investing surplus cash flow for higher returns or saving for future goals such as buying a house or contributing to superannuation.

Summary & Key Takeaways

• Help debt is a higher education loan program debt that is typically associated with low interest rates.

• Interest rates on help debt are in line with the Consumer Price Index, with the current rate being 7%.

• When considering whether to prioritize paying off help debt, personal views on debt, other outstanding debts, and future financial goals should be taken into account.